An online checking account is a checking account from an online bank, a financial institution that doesn’t have any physical branches. Every step of the account opening process takes place online. Once your account is open, you can check your balance and monitor transactions through an online portal via your smartphone, tablet or computer. Organizations and companies can make direct deposits into the account, just as they can with a traditional bank account. Most online banks also offer remote deposit, so you can deposit paper checks by taking pictures of them.
When it comes to accessing funds, online banks offer many of the same options as traditional checking accounts. You can set up direct debits and get a debit card you can present anywhere that accepts credit cards. Typically, you also have the freedom to order paper checks for an online checking account.
An online checking account and mobile banking are two related, but separate, banking terms. As previously explained, an online checking account is a checking account through an online bank.
Also called online banking, mobile banking is the general term for conducting banking online. When you have an online checking account, all your banking is mobile. Many traditional brick-and-mortar banks in Fort Collins, such as the Bank of Colorado and Alpine Bank, offer mobile banking as a service for account holders, giving them the ability to bank both online and in person.
Online checking accounts offer a variety of benefits for seniors.
With an online checking account, you can access your account information and conduct banking business anytime, anywhere. As a result, it's a convenient option for seniors who love to travel or who may struggle to visit a brick-and-mortar bank due to mobility issues or lack of transportation. You also may not need to wait until traditional business hours to get help with your account when you need it, as many online banks offer 24-7 customer service via phone and online chat.
Because they don’t operate physical branches, online banks typically have less overhead than traditional financial institutions. They often pass these savings along to customers, and one way they accomplish this is by having fewer fees and lower fees for things like using an out-of-network ATM, monthly account maintenance and overdrafts. For seniors on a fixed income, switching to an online bank can be a way to lower monthly costs.
Many online banks offer additional products, just like conventional banks. This way, you can have your savings account, credit card and loans all through one financial institution. Generally, online banks typically offer significantly higher interest rates on deposit accounts and lower interest rates on loans and credit cards than their brick-and-mortar counterparts. Some even offer interest-bearing online checking accounts.
Like traditional banks, most online banks have insurance through the Federal Deposit Insurance Corporation (FDIC). When you open your checking account with an FDIC-insured institution, you receive up to $250,000 of protection per depositor at that online bank, eliminating worries about what would happen in the event of a bank failure.
Although there are many good reasons to consider an online checking account, making the switch to an online bank does have a few downsides.
With an online bank, you won’t be able to visit a branch location if you need assistance. If you have a question, need to dispute a transaction or have another issue, you can only get help via phone or online chat. Seniors who have issues typing due to arthritis or difficulty hearing may find it more difficult to use these customer service options.
If you often bank in person, you have the opportunity to build relationships with the people at your local branch. As a result, you may feel more at ease turning to them for help and even look forward to visiting the branch to see those familiar friendly faces. Online checking accounts remove this human element from banking.
While online banks do offer many products, there are some services that may not be accessible if you make the switch to one, such as:
With an online checking account, you can typically only withdraw and deposit cash at ATMs. Most online banks partner with ATM networks, but not all ATMs participate in all networks, meaning you may have to travel further than you once did when you need to access or deposit cash. Before switching to any online bank, take a look at its network’s coverage map to see where the nearest ATMs are.
To determine if you should switch to an online checking account, weigh the above pros and cons carefully. Compare the account offerings at both traditional banks in Fort Collins and online institutions to make an informed decision.
